In regard to a partial amortization loan, the following statements are true:
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The monthly payments do not fully pay off the loan by the end of the loan period. - True. In a partial amortization loan, the payments do not completely pay off the loan balance by the end of the term.
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The borrower makes a large balloon payment at the end of the loan period. - True. At the end of the loan term, the borrower typically makes a large balloon payment to pay off the remaining balance.
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The amortization period is shorter than the loan period. - False. In a partial amortization loan, the amortization period is typically longer than the loan period.
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The monthly payment is based on a longer amortization period than the maturity of the loan. - True. The monthly payments are based on a longer amortization schedule, leading to a remaining balance at the end of the loan period.
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The amortization period is longer than the loan period. - True. This is another statement highlighting that the amortization schedule extends beyond the loan period, which is characteristic of a partial amortization loan.
So, the true statements are:
- The monthly payments do not fully pay off the loan by the end of the loan period.
- The borrower makes a large balloon payment at the end of the loan period.
- The monthly payment is based on a longer amortization period than the maturity of the loan.
- The amortization period is longer than the loan period.
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